Nvidia CEO says the company has largely conceded China's AI chip market to Huawei

NVIDIA CEO Jensen Huang has acknowledged that the company has "largely conceded" China's artificial intelligence chip market to Huawei, as tightening US export restrictions continue to reshape the global semiconductor landscape.

A blockbuster quarter overshadowed by China

Huang's remarks came as Nvidia reported another record-breaking quarter, with revenue surging 85% to $81.62 billion from $44.06 billion a year earlier.

The company also announced an $80 billion share buyback programme and raised its dividend. Despite the strong results, China remained the central flashpoint of the earnings conversation.

Huawei fills the void

"The demand in China is quite large," Huang told CNBC's Sara Eisen. "Huawei is very, very strong. They had a record year, they'll likely, very likely, have an extraordinary year coming up, and their local ecosystem of chip companies are doing quite well, because we've evacuated that market. We've really largely conceded that market to them."

The Chinese market once accounted for at least one-fifth of Nvidia's data centre revenue. However, the Trump administration told Nvidia in April that it would require a licence to export chips to China and several other countries, effectively shutting the company out of one of its most significant markets.

Washington's restrictions have accelerated Beijing's push towards semiconductor self-sufficiency, with Huawei emerging as the primary beneficiary.

"Expect nothing" on China approvals

Huang struck a notably cautious tone when asked about the prospects for any near-term reopening of the Chinese market.

"I don't have any expectation, which is the reason why we put all of our guidance, all of our numbers, all the expectations that I've set with all of our analysts and investors to invest nothing, to expect nothing," he said.

Nevertheless, Huang indicated Nvidia remained keen to re-enter the market if circumstances changed. "We would be more than delighted to serve the market," he said. "We have a lot of customers there, we have a lot of partners there, and we've been there for 30 years."

China summit fails to clarify outlook

Huang was a late addition to President Donald Trump's China summit last week, though the visit offered little clarity on whether Nvidia's H200 chips would be permitted for sale in China.

Reuters reported that some Chinese companies — including Alibaba, Tencent, ByteDance, and JD.com — had received approval from the US Commerce Department to purchase H200 chips.

However, a US trade representative confirmed that chip export controls were not part of the China talks, suggesting any significant easing of restrictions may remain some way off.

Nvidia's broader ambitions

Beyond China, Huang painted an ambitious picture of Nvidia's long-term trajectory. He described the company's investment strategy as spanning what he called the AI industry's "five-layer cake" — covering energy, chips, infrastructure, models, and applications. "The idea of [a] many times larger company is not out of the question," he said.

On capital allocation, Huang said Nvidia's first priority for its growing cash reserves was supporting its supply chain amid surging demand.

"As we're growing hundreds of billions of dollars at a time, we have to support our supply chain so that they are able to support our growth," he said.